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Thursday, November 5, 2015

Interview with Kevin Anderson, Appetize

Story by Benjamin F. Kuo

For our interview today, we sat down with Kevin Anderson, one of the co-founders of Los Angeles-based Appetize (www.appetizeapp.com), the developer of a cloud based enterprise point of sale solutions for venues and events. Appetize is backed by the Guggenheim, the 49ers Family Office, WME SVP of Music Marc Geiger, Roar Entertainment and others; the company recently announced deals with Live Nation and the Sacramento Kings, and is part of the Dodgers Accelerator.

What does Appetize do?

Kevin Anderson: we're a modern, point of sale platform, which has spent our first four years specifically focused on the entertainment space. Our products range from an iPad app, to a full scale, point of sale product with a cash drawer and credit card reader, to handheld point-of-sale units and mobile ordering. Until these first few years, we had worked with about 300 entertainment companies, including the PGA Tour, 32 Live Nation venues, to Madison Square Garden. We provide primarily enterprise, category, point-, and sit in between the legacy guys and mobile guys.

How'd you end up creating your products?

Kevin Anderson: We started from the consumer side of things, letting fans efficiently order from their seats using their phones We kept on iterating and innovating based on what the operators using our products told us they wanted, and that mobile ordering app turned into a handheld, point-of-sale product for wait staff, who could order on a device. We ended up between the enterprise, legacy point-of-sale products and a lot of mobile players, who just haven't created something to deal with multi-site, enterprise level hardware at the front end. The software also included reporting, analytics, and inventory controls across sites, regions, and a national point of view. We are just as reliable and enterprise grade as the legacy guys, who have been around for 25 to 50 years, where most of the mobile, point of sales only provide transactional value. We're really an enterprise solution.

So you figured out after engaging with your customers that you needed to move from the consumer side to the enterprise?

Kevin Anderson: Exactly. We listened to our customers and what they needed, and observed their operations. In the enterprise deployments with Live Nation, they had 4,400 point of sale locations, hundreds of volunteers, and we saw they needed something that was easy for them to learn and train with, something that was easy to understand, easy to learn, and fast. Plus, they needed to be able to spill beer on it, and handle general wear and tear. Most of the mobile folks have tried to do this by clipping something to an iPad and with an exposed, credit card reader, open to the elements, which doesn't work all that well. We listened to the operators, and kept on iterating and innovating, specifically for them.

Was it surprising to hear what those operators told you?

Kevin Anderson: We were actually surprised at how many operators are still running on cash, and in the mobile scenario, portable bars using pen and paper. In those cases, they don't have any kind of analytics or insights into their business. Cash tends to walk away in those cases, even with the legacy systems that are still around today. You have no insight into inventory counts, no reports, and no idea what parking lots are filling out, and when kegs are running low in concessions.

What is the background of you and your co-founders?

Kevin Anderson: I was actually in the beverage distribution industry, through a family company. Jason had started a couple of distribution and operatoins-based businesses out of college, and Max has worked for Apple, then for Red Bull, and on the Red Bull Stratos project, working with some amazing engineers. So we have business development, operations, and technology, all of those together as co-founders.

What's been the hardest thing you've learned so far starting the business?

Kevin Anderson: Two things. The first, is the concept of focus. Early on, four years ago, we thought we'd be the mobile ordering solution for everyone. For hotels, for cruise ships, for sports and entertainment, and for restaurants. However, we found out that there was a value in being laser focused. We figured out that by focusing on sports and entertainment, and being able to tell our clients we had built this specifically for them, resonated very well. We are now working outside of that, expanding to the convention center and business dining and cafeteria market, to universities and colleges, and we've brought in experts from those industries to run with that. I think the other, more practical thing you learn is the concept of growth. In the last two years, we quickly went from essentially just a few co-founders who were “making it happen” to close to 60 employees. That means being able to delegate, manage people, and ultimately keep incentivizing people to work their butts off and enjoy what they do every day. That's very different from being just three co-founders making it happen, which was the first two years of Appetize. The last couple of years has been growing, managing, and learning how to work with people.

Finally, what's next on the radar for you?

Kevin Anderson: We'll be having another funding opening up in January of next year, which will be a larger round of funding for us. That will mainly be institution-based, and from the business standpoint, will help us really open up our product. We are opening up our software to higher education, to campuses, to the general leisure industry, which for us includes convention centers and even working with a few different fast-casual restaurant chains. That also means business dining properties, amusement parks, museums, and zoos. We're going to continue to grow and sell and support those industries. We've already made a successful leap outside of entertainment, and at this point it's about growing those out, and attacking those next industries. It's all about applying sofwtare and hardware technology to the next vertical.